Meanwhile, estimates of uncollected tax in the US amount to about 15 per cent of total taxes.

The vast majority of cheats are understood to be cash-intensive businesses.

This revenue problem is exacerbated in some European countries where sales tax is more important than income tax.

According to Professor Rogoff, these nations are "really attuned to the idea of trying to phase down cash".

The value of unpaid taxes worldwide is easily $2 trillion to $3 trillion, he said.

"You are not going to get it all back by making it harder to use cash, but [avoiding tax and workplace law] is made very easy with cash," he said.

Big bills work for cocaine traders

Statistically speaking, most illegal drug trafficking transactions are in cash.

But drug dealers don't tend to use the smaller denominations, preferring hundred-dollar bills.

"If you have $1 million in hundreds, it weighs 10 kilograms and you can fit it in a briefcase," says Professor Rogoff.

That same amount in $10 bills would weigh 100 kilograms, making it much harder to move around, hoard, hide and count.

Lower value bills means more options in a crisis

One way for central banks to stimulate investment during a prolonged financial crisis is to apply negative interest rates.

However, in an economy awash with large denomination bills, sharply cutting rates could create "complete chaos", says Professor Rogoff.

Investments suddenly gone bad would spur a rush to convert capital into hard currency, decreasing the effectiveness of the interest rate drop (even leaving aside the problem of large amounts of money disappearing from the economy).

A mostly cashless society, argues Professor Rogoff, would allow central banks to dramatically cut interest rates in times of severe crisis without this chaos.

He adds that the plan would exclude small savers, instead targeting institutional investors such as pension funds and big banks — the kind of players that would need humidity-controlled, insured vaults to sustainably house billions of dollars.

"This is not something to do all the time: negative interest rate policy is hopefully something we don't need," he says.

"But with the very low level of interest rates right now [in the US], the very low level of inflation ... if there is another deep recession, central banks are going to be wishing they could do it."